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Comment by throwaway4good | Hacker News Reader

Agreed - this company - besides having a solid internet retail business - has big potential in being a logistic backend for other fashion brands. None of the existing retailers have the tech chops to do what Shein does in terms of logistics and supplier integration.

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Exactly, nobody does this well; even Amazon doesn't, as it isn't their focus. Let's all be frank: third-party sellers on Amazon pay a lot.

Those brands they could do logistics for would probably pay them much less than what Amazon's cut, here lies the opportunity.

So, it's a market for grabs that they kickstarted and showed that it can be really profitable.

In the old retail model, the markup is so high that they basically don't care about waste, factory cost, or logistics.

That does not make sense per real world profit margins. Broad market retail businesses earn sub 5% profit margins (except Home Depot, which seems to be an exceptionally well run operation).

If you are spending 95%+ of every dollar you earn, then surely you HAVE to be cognizant of waste, logistics, and COGS in order to stay in business.

The big costs are staff and rent. I was referring to the markup from the factory cost to the sticker price - that is very high in clothing. It can still be money losing business if you are not selling enough.

It is only because the retailer cares about factory cost that the retailer can afford the staff and rent. Even paying the relatively low factory cost, the retailer can barely eke out a profit, so they must be discerning about the price to quality ratio of the clothing they are buying to retail to the public.

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